Blockchain, the relative ‘new kid’ on the technological block, has been on the cusp of a breakout for a while now, with many going as far as saying it has the power to change the world.
The buzzword or power player evolved from bitcoin and the ability to send peer-to-peer transactions digitally and bypass traditional financial institutions. Even more than this though, blockchain has evolved into a way to digitize and monitor transactions. While this has tremendous potential, the truth is that no single revolutionary product or solution which can be attributed to blockchain, has altered the market, and the ones that have come out are simply not gaining enough traction.
So, does the lack of a game-changing solution justify the hype around blockchain or is it simply not living up to people’s expectations? While it’s true that there hasn’t been a breakout movement that solidifies blockchain as the revolutionary technology everyone claims it is, many companies experimenting with the new technology are still running proof-of-concept pilots. What this tells us is that the absence of scalability and disruption in the market isn’t due to lack of desire to adopt, but simply that the technology is still being fine-tuned.
The Blockchain Revolution We’re Looking For
In 2016, startups in the blockchain industry raised over $400 million from ‘traditional venture investors’ and an additional $200 million through Initial Coin Offerings (ICO). The decision to digitize the IPO and create a new offering – ICO – is a hint of the transformation that is to come when blockchain does penetrate the markets. The question, therefore, about the impact of blockchain, isn’t whether or not it will live up to the hype, but rather what type of change it will bring when it does. Will it be a disruptive technology or a collaborative one?
According to Harvard professor Clayton Christensen, there are two type of innovation – disruptive and sustainable. A disruptive innovation “relentlessly moves” within the market with the eventual goal of “displacing established competitors.” While doing so, a disruptive innovation opens the market to a larger population by simplifying accessibility. A sustainable innovation, on the other hand, simply makes products and solutions better. Historically, this is what bred success in established companies, making them predisposed towards the establishment of blockchain technology as a sustainable innovation.There are two types of #innovation, disruptive and sustainable, says Harvard prof., @claychristensen Click To Tweet
At the end of the day, blockchain will be recognized as a disruptive innovation that threatens the market since its applications, which are only now being explored, have the potential to completely change existing industries and shatter the way businesses are managed.
An Innovation Disrupting Industries
At its core, blockchain decentralizes central authority, essentially ‘giving the people the power.’ The financial industry, which has been the quickest to explore blockchain technology, has the most to lose from the widespread adoption of blockchain, since it brings with it increased transparency, reduced risk, lower costs and a near earth-shattering transformation to legacy financial institutions.
However, the financial industry can also gain just as much from the savings that blockchain technology can bring it. Santander, a European bank, believes that blockchain technology can help them save upwards of $20 billion a year, while IT consulting company Capgemini, estimates that blockchain technology can save consumers roughly $16 billion a year in banking and insurance fees, all pointing towards a complete disruption in the financial industry.
How Big Businesses Prepare for Disruption
As enterprises recognize that blockchain will inevitably replace legacy systems, they are beginning to shift their adoption of blockchain technology. More and more companies are seeking ways to integrate blockchain within their solutions, showing once and for all that blockchain is on its way to ‘living up to the hype.’More enterprises are integrating #blockchain as they recognize it will soon replace #legacy systems Click To Tweet
IBM, who recently announced their own proprietary blockchain solution, built in collaboration with SecureKey, boasted this past March that their “IBM blockchain,” has the power to support over 1000 transactions per second. Additionally, large-scale enterprises such as the Bank of Tokyo, Walmart, and Maersk are already collaborating with IBM to test the solution. Other enterprises, such as Microsoft Azure, have announced a more collaborative approach to blockchain technology, enabling customers to use whatever solution they want on the enterprise’s cloud.
Is the Hype Justified?
We always take the marketing hype with a grain of salt, but in this case, it seems that blockchain really is everything they say – and more.
To truly embrace blockchain technology, enterprises will need to take the solutions they tested through proof-of-concepts to the public, fueling widespread adoption of the technology. Furthermore, more industries will need to embrace change and push blockchain technology immersion on a large scale, recognizing that blockchain is so much more than just bitcoin.
As this happens, more regulations will be put into place and education on blockchain will continue to be emphasized, showing consumers that the new technology is trustworthy, dependable, and simple. Until then, we’re holding onto our guns and the claim that blockchain is going to live up to the hype.